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One part of the program will be available to 4 to 5 million homeowners who have a solid payment history on an existing home loan owned by Fannie Mae or Freddie Mac. Many of these homeowners have been unable to refi and take advantage of lower interest rates because their homes have lost value. This plan allows for rate and term refis up to a 105% loan-to-value, which will help many homeowners take advantage of today's lower rates or refinance an adjustable-rate home loan into a more stable product, such as a 30-year fixed rate loan.

To qualify, the home must be your primary residence and have a loan balance not exceeding $729,750. While there are still a few unknowns in the mix, this program will help a large number of homeowners cut their monthly expenses and benefit from the lower home loan rates available today.

The second part of the program will help up to 3 to 4 million at-risk homeowners avoid foreclosure by reducing monthly home loan payments. This program lets home loan servicers modify eligible loans for those who have experienced financial hardship. The plan is designed to help these at-risk borrowers decrease the payment amount on their existing loan.

Revised FHA Appraisal Guidelines in Effect
for Appraisals Done after April 1, 2009

Last Updated March 26, 2009

I wanted to reach out to you to keep you informed of some revised federal guidelines that outline 10 things that appraisers must do or provide for all FHA appraisals done after April 1, 2009:

1. The Market Conditions Addendum (Fannie Form 1004MC/Freddie Form 71).

2. At least 2 comparable sales within 90 days of appraisal date.

3. A minimum of 2 active listings or pending sales in addition to the 3 closed comparables.

4. Bracketed listings using both dwelling size and sales price when possible.

5. Adjust active listings to reflect the List To Sales Price Ratio.

6. Adjust pending sales to reflect contract sales price when possible.

7. Include original list price and any revised list prices.

8. Reconciliation of adjusted values of active or pending sales with adjusted values of closed comparable sales.

9. Absorption Rate Analysis.

10. Known or reported sales concessions on active and pending sales.

Do I Qualify?

• Only homeowners in good standing whose loans are held by Fannie Mae or Freddie Mac qualify.
• The property must be owner-occupied and the borrower must have enough income to make payments on the new mortgage debt.
• Borrowers can’t owe more than 105 percent of their home’s current value on their first mortgage. For example, if your home is worth $200,000 your first mortgage can’t exceed $210,000.
• Homeowners can’t take cash out during the refinancing to pay other debt.
• Borrowers have until June 2010 to apply for the program.

How do I know if my mortgage is owned by Fannie Mae or Freddie Mac?

• Call your current lender or mortgage or mortgage servicer. You can find the phone number on your monthly mortgage statement or coupon book.
• You can also contact Fannie Mae at 800-7FANNIE and Freddie Mac at 800-FREDDIE from 8 am to 8 pm EST. or, go to www.fanniemae.com/homeaffordable and www.freddiemac.com/avoidforeclosure and fill out the online request forms.

What borrowers qualify for the modification program?

• You don’t have to be behind on your mortgage payments to qualify. Delinquent borrowers and current borrowers who are at risk of imminent default are both eligible.
• The program applies to mortgages made Jan 1 or earlier. The mortgage payment including taxes, insurance and homeowners association dues must exceed 31 percent of the borrowers’ gross monthly income.
• The property must be the homeowner’s primary residence. It can’t be investor-owned, vacant or condemned. Home loans for single-family properties that are worth more than $759,750 don’t qualify.
• The program is voluntary, relying on a $75 billion subsidy to encourage mortgage companies to participate. Lenders must agree to reduce loan payments to 38 percent of a borrower’s monthly income. After that, the government and lender split the cost of bringing the payment down to 31 percent.
• Eligible borrowers will have to provide their most recent tax return and two pay stubs as well as an “affidavit of financial hardship” to qualify for the loan modification program. In the affidavit, applicants will have to cite the reasons behind their financial woes, such as job loss or a drop in income.
• Borrowers are only allowed to have their loans modified once. The program runs through Dec 31, 2012.

What if I’m in bankruptcy or in active litigation over my mortgage?

• That doesn’t necessarily keep you from qualifying for the modification program. And borrowers in active litigation can modify their home loans with waiving their legal rights.

What do I do to get help?

• For the modification program, call your lender or mortgage servicer to see if you’re eligible. For the refinance program, first find out if your mortgage is held by Fannie Mae and Freddie Mac.

How soon can I get help?

• Both the modification and refinancing programs start immediately. Properties would qualify for Fidelity Title's Online Discounted Erate

What if I don’t qualify for either program – is there any other way to get help with a mortgage?

• Contact your lender or mortgage servicer regarding other modification programs or refinance options. Alternatively, contact a local housing counselor to negotiate with your lender or servicer, to help locate other local resources like rescue grants or loans, or to facilitate a short sale or deed-in-lieu of foreclosure if staying in the home isn’t possible.
• A short sale is where homeowners sell houses for less than the amount owned on them and the lender then considers the debt paid off. A deed-in-lieu of foreclosure is where the borrower gives the property to the lender to satisfy a delinquent loan and to avoid foreclosure proceedings.
• Local housing counselors can be found at the U.S. Department of Housing and Urban Development’s Web site at www.hud.gov/offices/hsg/sfh/hcc/hcs.com

Do FHA, VA or USDA home loans qualify for modifications under Obama’s plan?

• Federal Housing Administration, Veterans Administration or the US Department of Agriculture are being modified under other programs.

-The Associated Press

Daily Breeze 3/10/2009